Cheaper oil to boost aircraft sales, Boeing official says

In Boeing’s 2014-2033 forecast for the global aviation industry, the Middle East region will need 2,950 aircraft worth $640 billion.

March 2, 2015

Updated: March 2, 2015 04:00 AM

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Dania Saadi

A drop in oil prices is expected to provide a boost to aircraft sales, a Boeing official said yesterday.

“We have today over half a trillion dollars of firm contracted business that we will deliver over the course of five to 10 years,” said Marc Allen, the president of Boeing International in Abu Dhabi. “Fuel prices have been a true tailwind on airlines’ operating costs basis so its helping them. I think it will get more passengers, more routes and more frequencies.”

In Boeing’s 2014-2033 forecast for the global aviation industry, the Middle East region will need 2,950 aircraft worth $640bn.

Gulf carriers account for 30 per cent of Boeing’s total wide bodied backlog orders, he added.

These airlines are leading the growth in the Middle East region, as they create hubs, increase routes and buy bigger planes, competing with their European rivals.

Such rivalry has degenerated into a war of words between US airlines and Gulf carriers, who have defended themselves against accusations by three US carriers of receiving over $40bn worth of government subsidies since 2004.

Delta Air Lines, United and American Airlines have asked US federal officials to mull slapping limits on Qatar Airways, Emirates Airline and Etihad Airways under the open skies agreements.

Mr Allen declined to comment on the impact of such moves on their sales growth, saying its “a government-to-government issue”.